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RWE, Verbund, Ørsted outperform other European peers in July

RWE AG was the top performer among select European utilities and power producers in July, with a total return of 13.1%, according to S&P Global Market Intelligence data. The German utility raised its full-year adjusted EBITDA guidance to a range of €1.40 billion to €1.7 billion and adjusted net income to a range of €500 million and €800 million, after posting a strong trading performance in the first half 2019.

RWE also continues to make progress on its pending €43 billion asset exchange deal with E.ON SE, securing Federal Energy Regulatory Commission approval in July to buy E.ON's renewable assets in the U.S. The utility is also in advanced talks with German government to shut down its coal-fired power plants in the country.

Austrian utility Verbund AG saw its total return rise 10% in the month. The company has seen organic growth in the first half of 2019, driven by higher wholesale electricity prices due to a sharp increase in the cost of carbon dioxide certificates. For 2019, the utility is expecting EBITDA to amount between approximately €1.18 billion and €1.25 billion.

Verbund was followed by Danish renewable energy developer Ørsted A/S with a return of 8.6% and Finnish utility Fortum Oyj with a return of 7%. During the month, Ørsted won a competitive auction for large-scale offshore wind farm in New York and was reportedly partnering with Maryland-headquartered Tradepoint Atlantic LLC to launch an offshore wind-focused partnership. Fortum on July 19 reported second-quarter comparable EBITDA of €372 million, an increase from €282 million in the same period of 2018.

Other select utilities with positive returns in July included Germany's Uniper SE and French utilities Suez SA, Engie SA and Electricité de France SA.

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Centrica PLC, on the other hand, saw its total return decline by 13.3% in the month, on the back of an exceptionally challenging environment in the first half of 2019, which impacted earnings and cash flows. The deterioration in cash flows prompted Moody's to lower its outlook on Centrica to negative from stable.

Spain's Red Eléctrica Corporación SA posted a negative return of 6.6%, followed by German companies E.ON SE and EnBW Energie Baden-Württemberg AG each with a negative return of 5.6%, and Naturgy Energy Group SA with a negative return of 4.3%.